Asked by Claudia Reyes on Jun 06, 2024

verifed

Verified

IFRS requires the use of absorption costing.

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for global use.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

  • Grasp the concepts of absorption costing and its alternatives in inventory accounting.
  • Understand the differences in inventory accounting standards between U.S. GAAP and IFRS.
verifed

Verified Answer

DM
Daniel MendezJun 06, 2024
Final Answer :
True
Explanation :
IFRS (International Financial Reporting Standards) requires the use of absorption costing for inventory valuation, as it mandates that all production costs (both variable and fixed) be included in the value of inventory.